4 Retail Stocks Looking Promising Ahead Of Festive Season

Sound economic fundamentals, gradual wage acceleration, steady job growth and improving consumer sentiment are working in tandem for Zacks Retail & Wholesale Sector, which usually takes the center stage during the holiday season. It also appears that consumer spending — one of the prime factors shaping the economy — will remain strong. Indeed, this time around, retailers are especially upbeat.

Retailers are deploying resources to enhance omnichannel capacities, introducing brands, remodeling or refurbishing stores and expanding same-day delivery options to expedite the shopping process during the busiest part of the year. Additionally, retailers are rationalizing supply chain, improving store-related technology and augmenting ship-from-store capabilities.

Meanwhile, retail giants have announced hiring plans to cope with a busy holiday season. According to the National Retail Federation (“NRF”), retailers are likely to appoint 585,000-650,000 temporary employees this festive season, up from 582,500 in the last year.

Going by the NRF’s recent sales projection, the retailers are all set to revel again in the euphoria of the upcoming holiday season. Data compiled by the nation's largest retail trade group calls for a 4.3-4.8% rise in November and December sales (excluding autos, gas, and restaurant) to $717.45-$720.89 billion, up from $687.87 billion last year and better than the five-year average sales growth of 3.9%.

Deloitte’s recent holiday sales projection of a 5-5.6% increase also hints at happy times ahead for retailers. Holiday sales, excluding motor vehicles and gasoline, are likely to be more than $1.10 trillion between November 2018 and January 2019. Meanwhile, e-commerce sales are estimated to improve 17-22% to reach $128-$134 billion.

From the above discussion it is quite apparent that the retail sector holds the baton, and adding a few stocks from the space that are likely to ride high on these bullish sentiments would be a prudent decision.

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